Esma’s Securities and Markets
Stakeholder Group’s (SMSG) proposed reforms to
cryptocurrency regulation could result in exchanges being
driven out of business, and could force secondary trading of
cryptocurrencies onto a multilateral
trading facility (MTF).
"This could drive smaller exchanges out of
business, unless they have significant cash resources at their
Ashurst’s Bradley Rice.
The new rules would mean cryptocurrencies
are indeed financial instruments and therefore subject to
financial regulation such as Mifid II, the Market Abuse
Regulation (MAR) and the Prospectus Regulation.
It’s not yet known certain whether Esma will adopt
these recommendations. Esma did not respond to
IFLR’s request for comment.
While the likes of Mifid and MAR have provided significant
angst for the mainstream financial sector, for a small fintech
startup these regulations would be particularly inhibitive. The
lack of expertise, resources and time to deal with the
regulations are said to be prohibitive...